June 17--There is an inevitability about President Putin's decision to play hardball with Ukraine over gas.
The Russian leader regards his country's energy wealth as a strategic weapon to be used as necessary to further the interests of the motherland.
Bob Dudley, now chief executive of BP, learnt this some time ago.
In 2008, when TNK-BP found itself in dispute with Moscow, Dudley's visa failed to be renewed and he had to flee the country.
Currently, as a minority shareholder in Rosneft, controlled by allies of Putin, Dudley can freely travel to Russia and BP has become a favoured partner in new energy projects in Siberia and the Arctic.
The pretext for Putin's action against Ukraine is the failure of Russia's troubled neighbour to settle a $4.5bn gas bill.
In the context of Moscow's estimated $500bn of reserves, this is not a significant sum. But it serves two purposes. It increases the pressure on Kiev to ease off in its military actions against pro-Russian militias in eastern Ukraine and reminds the European Union – Germany in particular – who is the master of their energy supplies.
If Russia wanted to do a deal with Ukraine over gas it could easily reach one.
Europe's energy commissioner, Gunther Oettinger, offered a deal over the weekend under which $1bn of the debt be paid now and the rest over the next year. With a package of IMF-led assistance on the way, that was eminently do-able.
On previous occasions, in 2006 and 2009, when Russia has put the screws on Ukraine, Britain was among those that suffered.
Some 15pc of Europe's gas comes through the Ukraine pipeline, and gas that would have been fed to the UK was diverted to the Ruhr municipalities because they pay a higher price and have the ability to cream off supplies. The lights came close to going out in Britain.
Fortunately, the current dispute comes in the summer, when domestic demand for natural gas is low. Moreover, since then, the Langeled pipeline, which connects Britain to Norway, has become fully operational. Centrica also took the sensible decision to sign long-term gas contracts with Qatar to bring liquid natural gas into the Isle of Grain in Kent for processing.
Nevertheless, unlike the Netherlands – which has invested heavily in gas storage – Britain has still to recognise its vulnerability to geo-political events by doing the same.
The combination of Russian energy nationalism and the advance of ISIS in Syria and Iraq shows the acute dangers of not having adequate supplies.
It eloquently makes the case for pressing on with fracking that could end the reliance of consumers and business on the whims of foreign potentates.
One of the great myths of finance, bought into by successive government, is that somehow the mutual sector is more responsible in dealing with consumers than the big banks. The sad fact is that both are as irresponsible as each other.
The implosion of the Co-op Bank, with all its claims of being more ethical, brought to public attention the falseness of claims that mutuality is automatically better.
Aside from its overweening ambition and rotten governance, the Co-op was involved in toxic debt, the selling of PPI and much of the other reprehensible activity practised by the High Street banks.
One hoped that the building societies might know better. But as we have now learned, the Yorkshire Building Society, one of a shrinking band, was at the forefront of stuffing its customers with an unsuitable investment product promising a guaranteed minimum return and potentially significantly more if the FTSE 100 delivered.
More than 84,000 investors poured their savings into the 'Cliquet' bond at a time when low interest rates made them desperate for better returns. But the Financial Conduct Authority found that, despite the seductive sales talk, the chance of achieving the maximum returns promoted was precisely zero.
The old adage, that if it looks too good to be true then it probably is, held firm in this case.
The Yorkshire experience shows why Britain needs new financial players and why it is important for TSB (coming to the market later this week) and Tesco Bank need to stick to their knitting and engage in utility banking.
We need financial firms that we can trust.
Britain's pension regulations and changes seem to be piling up as quickly as the revenue codes as monitored by the Tolley's tax guide.
A survey by the weekly Financial News found that in 2008-09 there were just 30 regulatory changes or consultations on pensions, a number that had swelled to 108 by 2013-14.
This is great business for pension consultants and advisers.
But how retirees are meant to get their heads around this stuff is impossible to say. Madness.
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